Luxury Buyers Drifted North, But the Tide May Be Turning
New data shows Sydney and Melbourne underperformed during the lifestyle-migration boom, but shifting price gaps suggest prestige buyers may be circling back.
3 min
Australia’s luxury housing map has been flipped on its head over the past five years, but the pendulum may finally be swinging back toward the big cities.
According to Ray White Group Senior Data Analyst Atom Go Tian, the pandemic years reshaped where prestige buyers put their money.
“If you were speaking about luxury houses five years ago, you wouldn’t even consider markets outside of Sydney and Melbourne,” he says.
But when COVID accelerated lifestyle migration and buyers were suddenly free to look elsewhere, the country’s wealthiest house hunters proved highly mobile.
“Luxury buyers proved themselves to be the most flexible and flocked away to where luxury was still sold at a discount,” Tian says. The result: Sydney and Melbourne were largely overlooked while regional prestige markets surged.
Both major cities saw their luxury prices spike briefly in 2021 as the COVID boom lifted the entire country, but the gains evaporated almost as quickly.
Rising interest rates and the lure of discounted luxury in the regions saw Sydney and Melbourne lose roughly half their 2021 uplift the following year.
The recovery since has been patchy. Tian says Sydney “grew six per cent between 2024 and 2025 after growing just two per cent between 2023 and 2024 to finally reach a new peak luxury price of $4.5 million”.
Melbourne, meanwhile, still hasn’t clawed back its pandemic peak. Luxury prices there rose five per cent between 2024 and 2025 after falling one per cent the year prior, ending 2025 at $2.6 million.
Over five years, the two major cities have been dwarfed by the east-coast lifestyle markets that stole their thunder. Sydney grew 35 per cent and Melbourne just 17 per cent.
Compare that with Brisbane (+77 per cent), Perth (+76 per cent), Adelaide (+73 per cent), the Gold Coast (+72 per cent), and the Sunshine Coast (+68 per cent).
That surge allowed the Sunshine Coast ($2.76 million) and Gold Coast ($2.86 million) to overtake Melbourne ($2.62 million) as the second and third most expensive luxury markets in the country.
Brisbane ($2.32 million) and Perth ($2.30 million) are now only 12 per cent cheaper than Melbourne, a huge shift from 2020 when both were 43 per cent cheaper.
Many assumed this decentralised luxury map was the new normal. But Tian says the last 12 months hint at a potential reversal.
“It’s easy to assume the new normal is a decentralised luxury market, but if the last 12 months signal what’s to come, luxury buyers may just be beginning to rediscover the value of Sydney’s prestige waterfront streets and Melbourne’s leafy inner suburbs.”
The price gaps that once tempted buyers north and west have narrowed. In 2020, Sydney was twice as expensive as the Gold Coast and Sunshine Coast.
Now the gap is closer to 1.5 times. Against Brisbane and Perth, the premium has shrunk from 2.5 times to 1.9. “Sydney’s premium looks more justified than overpriced,” Tian says.
Melbourne is a more complicated story. Its long lockdowns hit confidence harder than anywhere else, sending affluent buyers to other states. But Tian believes that weakness may now be its strength.
“At only 17 per cent growth over five years, it significantly underperformed relative to its fundamentals as Australia’s second-largest city.”
If interest rate cuts arrive and confidence lifts, he says the very buyers who abandoned Sydney and Melbourne could return to find relative value they haven’t seen in years.
Rising rates, construction inflation and shrinking investor confidence are pushing Australia deeper into a dangerous housing spiral that monetary policy alone cannot fix.
Automobili Lamborghini and Babolat have expanded their collaboration with five new colourways for the ultra-exclusive BL.001 racket, limited to just 50 pieces worldwide.
Office rents in Sydney, Melbourne and Brisbane are climbing at their fastest pace since the pandemic as tenants compete for premium CBD space amid tightening supply.
2 min
Australia’s major CBD office markets are recording some of their strongest rental growth since the pandemic, with businesses increasingly prioritising premium office space despite elevated geopolitical and economic uncertainty.
Knight Frank’s Australian Office Indicators Q1 2026 report found net effective rents in Sydney and Melbourne CBDs rose at their fastest annual pace since COVID-19, increasing 10.2 per cent and 6.8 per cent respectively over the 12 months to March.
Brisbane posted the strongest growth nationally, with net effective rents climbing 11.7 per cent over the same period.
The report points to a widening divide between prime CBD office towers and secondary office stock, as occupiers increasingly focus on quality, location and workplace amenity when making leasing decisions.
Knight Frank Senior Economist, Research & Consulting Alistair Read said demand remained heavily concentrated in premium assets within core CBD precincts, helping drive stronger rental growth in top-tier buildings.
“Occupier demand continues to be heavily concentrated in the most desirable CBD precincts and the highest-quality buildings, accelerating a sharp divergence between core and non-core markets,” Mr Read said.
According to the report, Sydney’s Core precinct and Melbourne’s Eastern Core significantly outperformed broader CBD markets over the past year.
“In Sydney’s Core precinct and Melbourne’s Eastern Core, net effective rents surged 14.3% and 16.1% over the past year, significantly outperforming the rest-of-CBD precincts,” Mr Read said.
The rental gap between prime and non-prime office locations has also continued to widen sharply.
“As a result, core CBD rents are now 54% higher than non-core locations in Sydney and 93% higher in Melbourne, highlighting the growing premium placed on amenity, accessibility and workplace quality,” he said.
Knight Frank said the strong rental growth across the major CBDs was being underpinned by a limited supply pipeline, with few new office developments expected to be delivered in the near term.
Mr Read said subdued construction activity was likely to support ongoing rental growth and tighter vacancy rates over the medium term, particularly for premium office towers.
“The combination of sustained demand and declining levels of new development will aid ongoing prime rental growth and lower vacancy rates over the medium term, particularly for best-in-class assets,” he said.
The report noted that current economic conditions were making new office developments increasingly difficult to justify financially.
“Economic rents remain well above expected market rents, making the construction of new office towers largely unviable, and concentrating tenant demand into existing buildings,” Mr Read said.
While suburban office markets generally remained subdued compared with CBDs, Melbourne’s Southbank precinct was identified as a relative outperformer, recording annual net effective rental growth of 2.7 per cent.
The report comes as broader Asia-Pacific office markets continue to stabilise following several years of disruption linked to hybrid work trends, inflation and rising interest rates.
Knight Frank’s separate Asia-Pacific Q1 2026 Office Highlights report found Sydney and Brisbane were among the strongest-performing office rental markets in the region, behind only Bengaluru and Tokyo for annual prime net face rental growth.
The Asia-Pacific report also found 18 of the 24 cities monitored across the region recorded stable or increasing rents in the first quarter of 2026, even as geopolitical uncertainty intensified following escalating conflict in the Middle East.
Once a sleepy surf town, Noosa has become Australia’s prestige property hotspot, where multi-million dollar knockdowns, architectural showpieces and record-setting sales are the new normal.
From farm-to-table Thai to fairy-lit mango trees and Coral Sea vistas, Port Douglas has award-winning dining and plenty of tropical charm on the side.
